Griffith University 7003MKT: Tesla Motors Opportunity Analysis Report

This report provides a detailed opportunity analysis of Tesla Motors, examining its market position and potential for growth. The introduction provides an overview of Tesla, its mission, and its focus on sustainable energy. A situational analysis explores the electric vehicle market, highlighting its rap...Read More

Running head: OPPORTUNITY ANALYSIS FOR TESLA MOTORS
OPPORTUNITY ANALYSIS FOR TESLA MOTORS
Name of the Student
Name of the University
Author Note

1
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Table of Contents
Introduction......................................................................................................................................2
Situational Analysis.........................................................................................................................2
PESTLE Analysis............................................................................................................................3
Consumer Analysis..........................................................................................................................4
SWOT ANALYSIS.........................................................................................................................5
Marketing Objectives.......................................................................................................................6
Conclusion.......................................................................................................................................7
Bibliography....................................................................................................................................8

2
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Introduction
The aim of the report is to present a detailed opportunity analysis of the Tesla Motors thereby
exploring it macro and micro analysis of the company. Tesla Inc., was founded in the
year 2003 and was earlier known as Tesla Motors, is particularly based in Palo Alto,
California specializing the manufacturing solar panel, batteries of lithium ions and a wide
variety of electric vehicles. Elon Musk is the CEO of Tesla Inc. who envisions to
transform commutation to provide affordable electric vehicles to average consumers
(Endsley, 2017). Tesla was initially started by a group of engineers aiming to bring
revolution in electric cars. These engineers realized the potential of the electric cars
which can be more efficient than the gasoline and diesel cars. Tesla builds the all-electric
vehicles are clean and sustainable form of energy which believes to world should not rely
in fossil fuels and move forward towards a zero-emission future. Tesla’s mission
statement: “to accelerate the world’s transition to sustainable energy” (Mangram, 2012).
Situational Analysis
Market Analysis
According to ReportBuyer, the global market of electric vehicles is predicted to increase at a
rapid pace such as compounded growth rate ranges from 21.4% in the period of 2018 to
2026. Looking at such great potential of the EV market in US, Tesla has been ruling as it
has been selling three most efficient bestselling EV cars (Morrish, 2010). While any
nations have understood that EV is a potent solution in the near future, China has also

3
OPPORTUNITY ANALYSIS OF TESLA MOTORS
revamped its strategy to enter into the market to take a lead in producing and
manufacturing electric cars. Further, China is accounting for over half of the electric
vehicles worldwide. Though Tesla has not been able to meet its production target and has
been catering to more than 600 sales of EVs in United States (Kanagal, 2015).
PESTLE Analysis
Political analysis – Government entities play an influential role as the policies related to trade
affect the business of the company, further other political factors like when a government
incentivizes the electric automobiles facilitates production of the cars. Any kind of global
agreement with another country also affect the production of the cars as it increases the
demand for the product (Moritz, 2015). The company can strengthen its financial
performance as well as expand its trade agreements across the globe which will increase
the popularity and expand the market base of the cars.
Economic Analysis- There are certain economic factors such as growth of the market, level of
trade, currencies of the different countries, exchange rate and other economic variables
directly or indirectly influence the automotive market (Kauerhof, 2017)
. Decreasing costs of batteries, decline in renewable energy costs act as an opportunity while the
economic stability issues act as a threat to the company to conduct a sustainable business. The
affordable raw material which are generally cheaper can bring major opportunities for the
business.
Social Analysis- The social conditions as increasing use and popularizing of low carbon
lifestyles, greater preferences for the renewable energy, and greater distribution of wealth

4
OPPORTUNITY ANALYSIS OF TESLA MOTORS
in the markets of developing nations attracts business to adopt these cars as a means of
combating the hazards of the harmful gases generated from the fossil fuels (Ayala, 2016)
. The purchasing power of the buyers, potential of the customers to afford expensive electric cars
of the company greatly define the business policies and operations.
Technological Analysis- The frequent changes in the material engineering technology
determines the cost efficiency such excessive high rate changes in technology, increase in
automation of the business processes and popularity of the online mobile systems facilitate in the
integration of its automobile with the latest online systems.
Ecological analysis- The macro-environment of the Tesla subject to the climate change,
increasing environmental program, improvised standards disposal of wastes, popularization of
sustainable means of resources greatly influence the business as Tesla champions environment
friendly products which plays a pivotal role in growth of the business which pivots on electricity
in the automobiles.
Legal Analysis- The patent protection, trademark, protection of innovation and intellectual
property rights are crucial when operating in a newer forms of technology which has the
potential to expand it wide market base, increase in the regulation of the sales and safely
enter into the international market (Nykvist, 2015).
Consumer Analysis
Tesla sales hover in the premium segment as they currently retailing from over 83 locations
worldwide and also aims to come with futuristic cars to capture the newer developed

5
OPPORTUNITY ANALYSIS OF TESLA MOTORS
consumer base. Employing over more than 6000 people it has been consistently
expanding with its newer generation cars thus its contribution has been phenomenal
(Debye, 2014). Tesla have consistently communicates its upcoming new products so as to
make a well informed consumer base as well as understand the needs of the consumers.
SWOT ANALYSIS
Strengths- Tesla motors have various strengths such as its high cutting-edge technologies, low
cost lithium-ion batteries, which have been incorporated in many hi-tech cars of
Mercedes-Benz which has used of Tesla powertrain, Toyota also uses Tesla motors to
enhance its capacity. Moreover, GE have trackers which keeps a consistent eye on the
innovations of Tesla. It has also created a monopoly which have been targeting the
alternate energy cars (Motors, 2014).
.
Weakness- There are some vulnerable aspects of the as poor liquidity due to which Tesla find
extremely challenging while competing with Ford, Fiat and other industry rivalries. Some
capacity issues like that of a plant located in California has excellent capacity to make
over 5 lac vehicles but the maximum production of the company is limited to only this
due to which company cannot go for higher volumes of production thus limiting its
ability to compete actively. Further, consumers are less aware to the specialized products
which Tesla has built as these products intends to tap the futuristic needs (Kauerhof,
2017).

6
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Opportunities- The vehicle technology such as new hybrid the cars, self-driven autonomous
cars, battery operated cars, have a huge potential in the backdrop of emerging environmental
concerns worldwide. Tesla has tapped the potential and developed many products which has can
a potent solution amidst the hazards of diesel cars.
Threats- There are certain threats such as competition which Tesla has been struggling to meet
the challenges arose due to intense cut-throat by Ford, General Motors, Fiat and other
technological giants like Google which has been detrimental to the growth of the business.
Marketing Objectives
Tesla has been leading brand in EVs which has been consistently revamping its promotional
strategies through social media and greater online presence of Elon Musk and his exemplary
vision to embark a revolutionary journey for a life changing experience for the public and private
transportation. Tesla ranks in top three where it does not have to pay for advertisements in order
to increase its sales (). It has built strong brand identity by positioning its products strategically
in the market. It aims to promote the concept of sustainable transport through the advent of
innovation in order to produce accessible and affordable vehicles. The company has some
primary objectives such as-
1. Tesla aims to generate demand for EVs and drive its sales and build a strong long term
brand awareness and manage the reputation of the company.
2. It aims to retain the existing brand loyalty and explore the potential of the developing
nation which has higher population and other pollution crisis thus expand its international
presence.

7
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Tesla aims to increase its market share to over 20% by 2018 which was initially targeted at 5 %
in 2015 (Kauerhof, 2017).
3. There has been continuous pursuance to increase the waiting list of Model S and Model
X from 20,000 cars to over 50,000 cars (Endsley, 2017).
4. The company aims to educate the customers about its future goals and perspectives in
innovative products which can transform public transportation like hyper loop, pod taxis
and other newer modes of transportation which the CEO has been vocal on various social
media platforms.
Conclusion
The company has a vibrant future as the company has delved deeper into the general
issues plaguing such as a hazards of using non-renewable resources which has negative
implication in the long term. Elon Musk has been a flag bearer of sustainable transportation
aiming to educate the consumers about the EVs which has a bright future. Its innovation can
have huge impact on the people across the globe and thus help in reforming the transportation
which are renewable sources of energy like solar and wind energies or electrical energy.
Struggling to fight against immense competition with other brands like Ford, Fiat, Toyota and
other brands who have also come to the fore with newer forms EVs, Tesla has been positively
moving upwards in its growth trajectory.

8
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Bibliography
Ayala, R. (2016). Lowering Global Consumption of Petroleum, While Increasing Profit: Tesla
Motors Ridesharing . Cardinal Stritch Uniiversity.
Debye. (2014). E-car industry analysis from the perspective of business model dynamics.
University of Twente.
Kanagal, N. (2015). Innovation and product innovation in marketing strategy. Journal of
Management and marketing research.
Kauerhof. (2017). Strategies for Autonomous, Connected and Smart Mobility in the Automotive
Industry. A Comparative Analysis of BMW Group and Tesla Motors Inc.
M.R, E. (2017). Autonomous driving systems: a preliminary naturalistic study of the Tesla
Model S. Journal of Cognitive Engineering and Decison Making.
Mangram, M. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis.
Journal of Strategic Marketing.
Moritz, M. R.-C. (2015). Tesla Motors, Inc.-Pioneer towards a new strategic approach in the
automobile industry along the open source movement. Management of engineering and
Technology.
Morrish, S. M. (2010). Entrepreneurial marketing: acknowledging the entrepreneur and
customer-centric interrelationship.

9
OPPORTUNITY ANALYSIS OF TESLA MOTORS
Motors, T. (2014). Supercharger.
Nykvist, B. &. (2015). Rapidly falling costs of battery packs for electric vehicles. . Nature
Climate Change.